'Budget' iPhone disappoints target market China

Sep. 11, 2013
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A woman uses a mobile phone as she walks past an Apple iPhone 5 poster on Sept. 11 in Beijing. Apple's lower-cost iPhone 5C will retail for more than $700 in China, putting it out of reach of most consumers and raising questions over the firm's ability to build sales in the world's biggest mobile market. / Wang Zhao, AFP/Getty Images

by Calum MacLeod, USA TODAY

by Calum MacLeod, USA TODAY

BEIJING - Apple has just saved Chinese men from their prying wives. The new fingerprint sensor that unlocks the latest iPhone model will foil Chinese wives who habitually check partners' phones for hints of infidelity, according to a joke popular online Wednesday.

Whatever the reason for purchase, Apple executives must hope Chinese consumers snap up the new iPhone 5S and 5C to stem slumping sales in the world's largest smartphone market. The brand has lost its luster in recent years thanks to cheaper but impressive products offered by major rival Samsung, and a clutch of domestic players such as Xiaomi.

But some less than enthusiastic reactions Wednesday suggest Apple still faces serious challenges in seizing wider market share in China, a crucial marketplace for the California-based firm, and its major manufacturing base.

At Apple's official store in Beijing on Wednesday, salesman Teddy Lu said customers were showing strong interest in the new models, which can be ordered online in China starting Sept. 17.

Browsing the older versions, Gary Chen, 51, said he's a fan, but many friends and colleagues prefer other brands including Xiaomi for their cheaper price, fast speeds and wide range of functions.

"Apple will have to adapt better to the market," said Chen, a music executive.

Jessica Ma, a Samsung Galaxy user visiting a nearby cellphone retailer, said Samsung's use of the Android operating system, by far the most popular in China, and its large screen, were key to her choice of phone.

"I used to have an iPhone, but I don't intend to switch back now," said Ma, 27, a business assistant in a Beijing company.

The latest iPhone launch highlighted the importance of China's already giant and growing smartphone market. For the first time, the product unveiling was near-simultaneous in both the USA and the Peoples Republic of China, and the two new phones will be sold in both markets on the same day, Sept. 20.

But the high price failed to impress many Chinese phone users who had been expecting the 5C, which lacks the computer reader carried on the more premium 5S, to be the long-anticipated budget iPhone, aimed at conquering highly price-conscious markets such as China and India.

Others complained that the screen size on the two new phones remains significantly smaller than the Samsung Galaxy.

The Apple website offered the 5C at $732 and the 5S at $863. Both can run on the networks of China Unicom and China Telecom. A cheaper deal may rest on whether Apple can seal a distribution agreement with China Mobile, the nation's largest network with over 700 million subscribers.

"Selling in China for $732, how is that a cheap price?" asked Xiang Ligang, an IT company employee, on Sina Weibo, China's hugely popular Twitter-like micro-blogging platform.

"No doubt this iPhone is still an excellent cellphone, but it will die from Apple being cocksure and impervious to criticism," he wrote Xiang, who predicts the 5C new color range won't persuade Chinese consumers.

Web entrepreneur Fang Xingdong, who has 430,000 followers on Weibo, took an even tougher line.

"In the smartphone field, Apple has turned from a leader to a follower to a drop-out," wrote Fang, who criticized the product launch for revealing "the least innovative content ever in Apple's history".

In central Wuhan city, college teacher Deng Shasha said she was proud her husband bought her a Chinese-made and designed Xiaomi cellphone, costing $300.

"I'm especially proud as the Xiaomi founder studied at the same college as me in Wuhan," she said. "It's fast and convenient to use, with many apps. I'm used to it now, and will probably buy another in the next 12 months."